Pay and pray

Research shows Australians are increasingly happy to pay online, and hope like hell it gets there…

BY Bryn Nicholson

April 9, 2009

A recent online survey of consumer attitudes to online payments shows that while consumers have doubts about the security of online payment systems, they are willing to use them, when they perceive them to be secure and easy to use.

The survey included responses from 412 Australian consumers, who have used some form of online payment in the past six months, aged 16 and above.

The survey was conducted in March 2009 and covered all major methods of online payment, separating out the attitude to Visa, MasterCard, and Amex credit card online payments, as well as online banking payment methods – BPAY and PayAnyone. Debit cards and PayPal were also included.

BPAY is the leading online payment method, in terms of frequency of use with 45 per cent of all respondees reporting that they use BPAY at least once per week. Visa credit card transactions are reported as being very frequently used, with 28 per cent of respondees making an online payment with a Visa card at least once a week.

PayAnyone is also heavily used, with 26 per cent making online payments at least weekly. Heavy use of the key payment facilities available through online banking – BPAY and PayAnyone show how active Australians are in the use of online banking tools.

Security by degrees
The survey asked for feedback on the degree of security associated with the identified payment methods. A rating system classifying methods as Very Secure, Secure, Some Risk, Risky was used.

In these results, Very Secure and Secure are grouped together, as are Some Risk and Risky.

Perceived security of payment methods
The online banking based payment methods are seen as most secure. BPAY is seen as the most secure online payment method (83 per cent Secure or Very Secure), followed by PayAnyone (64 per cent Secure or Very Secure). Visa credit cards are perceived to be more secure for online payments (58 per cent Secure or Very Secure) compared with MasterCard (45 per cent) or Amex (24 per cent). This may reflect the impact of the ‘Verified by Visa’ advertising campaign, as well as the overall ‘mindshare’ of these cards. The perceived security of MasterCard and Amex Cards, for online payments is much higher for individuals that regularly use these cards. PayPal is also rated very highly for security by users of this payment method.

PINning online transactions
Users were asked whether they would consider using a PIN which was generated for an online payment transaction. No information was provided on the method used to generate the PIN, such as through the card itself or an SMS message. More than half (55 per cent) of respondents indicated that if this facility was available, they would use it, which indicates a willingness to add an additional step to a payment transaction, to ensure greater security.

Familiarity breeds content
In response to the question: “Would you be willing to make on online purchase from a company which you were not familiar with?” only 19 per cent answered ‘Yes’ with ‘No’, at 28 per cent and ‘Maybe’ at 53 per cent. This shows that, the perceived reputation of the payee is an important factor for many users of online payments.
However, when asked a follow up question: “Would you be willing to make an online purchase from a company which you were not familiar with, if the value of the purchase was less than $20?” The perception changes significantly – 43 per cent said ‘Yes’, 16 per cent said ‘No’ and 41 per cent said ‘Maybe’. The small payment amount reduces the resistance to making an online payment to an unknown payee.

Gauging Google
“Would you use a Google Online Payment service?” This was perhaps an unfair query, given that the question provided no information on the features available, nevertheless 42 per cent said they would use such a service. Thirteen per cent said ‘No’ and 45 per cent said ‘Maybe’.

Bryn Nicholson is an independant consultant.